Beasley Broadcast(BBGI) - 2023 Q1 - Quarterly Report

Part I: Financial Information Item 1. Condensed Consolidated Financial Statements Net revenue increased 3.7% to $57.8 million, operating results improved to $0.4 million income, and net loss narrowed to $3.5 million Condensed Consolidated Balance Sheets Total assets decreased to $698.1 million, driven by lower cash and receivables, while liabilities and equity also saw reductions Balance Sheet Highlights | Balance Sheet Highlights | Dec 31, 2022 | Mar 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $39,534,653 | $35,894,663 | | Total current assets | $105,660,530 | $92,108,034 | | Total assets | $714,943,355 | $698,128,402 | | Liabilities & Equity | | | | Total current liabilities | $56,694,645 | $51,021,947 | | Long-term debt, net | $285,472,107 | $285,839,233 | | Total liabilities | $491,454,547 | $478,027,437 | | Total stockholders' equity | $223,488,808 | $220,100,965 | Condensed Consolidated Statements of Comprehensive Loss Net revenue grew 3.7% to $57.8 million, operating income reached $0.4 million, and net loss per share improved to ($0.12) Income Statement Highlights | Income Statement Highlights | Q1 2022 | Q1 2023 | | :--- | :--- | :--- | | Net revenue | $55,720,268 | $57,779,120 | | Total operating expenses | $58,437,022 | $57,366,075 | | Operating income (loss) | ($2,716,754) | $413,045 | | Net loss | ($3,738,945) | ($3,536,566) | | Net loss per share (Basic & Diluted) | ($0.13) | ($0.12) | - The improvement in operating income was significantly impacted by the absence of a $1.9 million impairment loss that was recorded in Q1 2022[9][19] Condensed Consolidated Statements of Cash Flows Operating cash flow shifted to a $2.4 million outflow, leading to a $3.6 million net decrease in cash to $35.9 million Cash Flow Highlights | Cash Flow Highlights | Q1 2022 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $735,374 | ($2,445,165) | | Net cash used in investing activities | ($1,375,775) | ($1,169,280) | | Net cash used in financing activities | ($31,544) | ($25,545) | | Net decrease in cash and cash equivalents | ($671,945) | ($3,639,990) | | Cash and cash equivalents at end of period | $50,706,697 | $35,894,663 | Notes to Condensed Consolidated Financial Statements Notes detail revenue by segment, with Digital growth, long-term debt of $290 million, and a $1.9 million impairment loss in Q1 2022 Net Revenue by Source | Net Revenue by Source | Q1 2022 | Q1 2023 | | :--- | :--- | :--- | | Audio | $47,365,145 | $47,417,966 | | Digital | $7,808,250 | $9,976,785 | | Other | $546,873 | $384,369 | | Total | $55,720,268 | $57,779,120 | - The company's long-term debt is primarily composed of $290 million in 8.625% senior secured notes, which mature in 2026. These notes carry restrictive covenants limiting actions such as incurring additional debt and paying dividends[20][24] Segment Operating Income (Loss) | Segment Operating Income (Loss) | Q1 2022 | Q1 2023 | | :--- | :--- | :--- | | Audio | $3,202,280 | $5,743,608 | | Digital | ($597,977) | $22,422 | | Other | ($893,336) | ($658,572) | - In Q1 2022, the company recorded a $1.9 million impairment loss related to the FCC license for WWNN-AM, which was sold on April 1, 2022[19] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes 3.7% revenue growth to digital segment investment, impacting operating expenses and shifting cash flow to a $2.4 million outflow Results of Operations Net revenue increased 3.7% driven by digital growth, operating expenses rose due to digital investment, and net loss narrowed to $3.5 million Revenue Change by Segment (Q1'23 vs Q1'22) | Revenue Change by Segment (Q1'23 vs Q1'22) | Change ($) | Change (%) | | :--- | :--- | :--- | | Audio | $52,821 | 0.1% | | Digital | $2,168,535 | 27.8% | | Other | ($162,504) | (29.7)% | | Total Net Revenue | $2,058,852 | 3.7% | - Management stated that the increase in digital revenue was due to continued growth in the digital segment, while the rise in operating expenses was primarily due to continued investment in that same segment[60][61] - A $1.9 million impairment loss related to an FCC license was recorded in Q1 2022, which did not recur in Q1 2023, positively impacting the year-over-year comparison of operating results[61] Liquidity and Capital Resources Liquidity relies on cash and internal cash flow, with senior notes imposing covenants, and operating cash flow shifted to a $2.4 million outflow - The company's primary sources of liquidity are internally generated cash flow and cash on hand. Future needs are expected to be met through these sources, additional borrowings, or equity offerings, as permitted by debt indentures[63][66] - The indenture for the senior secured notes contains restrictive covenants that limit the company's ability to pay dividends, incur more debt, and make certain investments or asset sales[65] Cash Flow Comparison (Q1'23 vs Q1'22) | Cash Flow Comparison (Q1'23 vs Q1'22) | Q1 2022 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $735,374 | ($2,445,165) | | Net cash used in investing activities | ($1,375,775) | ($1,169,280) | Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company qualifies as a smaller reporting company - Disclosure about market risk is not required for smaller reporting companies[71] Item 4. Controls and Procedures Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[72] - There were no material changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[72] Part II: Other Information Item 1. Legal Proceedings The company is involved in routine litigation, none expected to materially impact financial condition or operations - The company is not a party to any lawsuit or proceeding that management believes is likely to have a material adverse effect on its financial condition or operations[73] Item 1A. Risk Factors No material changes to risk factors were reported since the 2022 Annual Report on Form 10-K - No material changes to the company's risk factors were reported for the period, referencing the disclosures in the 2022 Form 10-K[74] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 27,524 shares of Class A common stock to fund withholding taxes for restricted stock units Share Repurchases for Withholding Taxes | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 – 31, 2023 | 7,677 | $1.13 | | Feb 1 – 28, 2023 | — | — | | Mar 1 – 31, 2023 | 19,847 | $0.85 | - All shares purchased during the quarter were to fund withholding taxes in connection with the vesting of restricted stock units under the company's 2007 Equity Incentive Award Plan[76] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None[77] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[77] Item 5. Other Information The company reported no other information for the period - None[77] Item 6. Exhibits This section lists exhibits filed, including CEO/CFO certifications and Interactive Data Files (XBRL) - Exhibits filed include: * CEO and CFO certifications pursuant to Rule 13a-14(a)/15d-14(a) * CEO and CFO certifications pursuant to 18 U.S.C. Section 1350 * Inline XBRL documents[79][80][81][82][83]